STATEMENT OF CASH FLOWS Prepared by James R. Reap

STATEMENT OF CASH FLOWS BALANCE SHEET CLASSIFICATIONS: ASSETS LIABILITIES & EQUITY (1) _____________---> (2) _____________---> -------------------------------> (3) _____________---- Current Assets Current Liabilities Retained Earnings (Net Income only) Operating Property, Plant, & Equipment Long Term Investments Long Term Liabilities Paid in Capital Retained Earnings (Dividends only)

STATEMENT OF CASH FLOWS BALANCE SHEET CLASSIFICATIONS: ASSETS LIABILITIES & EQUITY (1) _____________---> (2) _____________---> -------------------------------> (3) _____________---- Current Assets Current Liabilities Retained Earnings (Net Income only) Operating Property, Plant, & Equipment Long Term Investments Long Term Liabilities Paid in Capital Retained Earnings (Dividends only) Investing

STATEMENT OF CASH FLOWS BALANCE SHEET CLASSIFICATIONS: ASSETS LIABILITIES & EQUITY (1) _____________---> (2) _____________---> -------------------------------> (3) _____________---- Current Assets Current Liabilities Retained Earnings (Net Income only) Operating Property, Plant, & Equipment Long Term Investments Long Term Liabilities Paid in Capital Retained Earnings (Dividends only) Investing Financing

STATEMENT OF CASH FLOWS OPERATING ACTIVITIES SECTION 1: CASH FLOWS FROM ______________________________ Net Income, per Income Statement _____ Non-cash expenses (Depreciation, Depletion, & Amortization) _____ Losses on non-current items _____ Decreases in current assets _____ Increases in current liabilities _____ Amortization of bond premium _____ Gains on non-current items _____ Increases in current assets _____ Decreases in current liabilities + + + Simple Rules: Net Income + Depr + + Losses - Gains - + C A - C A - CASH + CASH - + C L - C L - + CASH - CASH -

STATEMENT OF CASH FLOWS INVESTING ACTIVITIES SECTION 2: CASH FLOWS FROM ______________________________ Includes total cash received from and paid for the following: _____________________________________________________ Property, Plant, & Equipment and Long Term Investments FINANCING ACTIVITIES SECTION 3: CASH FLOWS FROM ______________________________ Includes total cash received from and paid for the following: _____________________________________________________ Long Term Liabilities, Stock Transactions, and Dividends Paid

MONOPOLY COMPANY The Comparative Balance Sheets of the Monopoly Company for December 31 of the current year and the preceding year is as follows: Current Preceding Year Year Change Cash $ 93,400 $ 57,800 $35,600 + Trade receivables (net) 125,000 123,500 1,500 + Inventories 146,500 108,900 37,600 + Investments 0 65,000 65,000 - Land 145,000 0 145,000 + Equipment 367,600 278,600 89,000 + Accumulated depreciation (110,900) (87,400) 23,500 + $766,600 $546,400 Additional Information: (a) Equipment and land were acquired for cash. (b) There were no disposals of equipment during the year. (c) The investments were sold for $95,000 cash.

MONOPOLY COMPANY The Comparative Balance Sheets of the Monopoly Company for December 31 of the current year and the preceding year is as follows: Current Preceding Year Year Change Accounts Payable $ 82,400 $ 74,000 $ 8,400 + Accrued Expenses 6,700 6,000 700 + Dividends Payable 18,400 15,700 2,700 + Common Stock 100,000 70,000 30,000 + Paid In excess of Par 320,000 200,000 120,000 + Retained Earnings 239,100 180,700 58,400 + $766,600 $546,400 Additional Information: (d) The common stock was issued for cash. (e) There was a $73,600 debit to Retained Earnings for cash dividends declared. (f) There was a $132,000 credit to Retained Earnings for net income. Hint: Start with Net Income at top and then Cash at the end of the year!

STATEMENT OF CASH FLOWS FORM Cash flows from Operating Activities: Net Income $132,000 Add: $ Deduct: $ ______ ______ Net cash flows from operating activities $

MONOPOLY COMPANY The Comparative Balance Sheets of the Monopoly Company for December 31 of the current year and the preceding year is as follows: Current Preceding Year Year Change Cash $ 93,400 $ 57,800 $35,600 + Trade receivables (net) 125,000 123,500 1,500 + Inventories 146,500 108,900 37,600 + Investments 0 65,000 65,000 - Land 145,000 0 145,000 + Equipment 367,600 278,600 89,000 + Accumulated depreciation (110,900) (87,400) 23,500 + $766,600 $546,400 Additional Information: (a) Equipment and land were acquired for cash. (b) There were no disposals of equipment during the year. (c) The investments were sold for $95,000 cash.

STATEMENT OF CASH FLOWS FORM Cash flows from Financing Activities: Add: $______ $ Deduct: $______ ______ Net cash flows from financing activities _______ Increase or decrease in cash Cash at the beginning of the year _______ Cash at the end of the year $35,600 57,800 $93,400

MONOPOLY COMPANY The Comparative Balance Sheets of the Monopoly Company for December 31 of the current year and the preceding year is as follows: Current Preceding Year Year Change Cash $ 93,400 $ 57,800 $35,600 + Trade receivables (net) 125,000 123,500 1,500 + Inventories 146,500 108,900 37,600 + Investments 0 65,000 65,000 - Land 145,000 0 145,000 + Equipment 367,600 278,600 89,000 + Accumulated depreciation (110,900) (87,400) 23,500 + $766,600 $546,400 Additional Information: (a) Equipment and land were acquired for cash. (b) There were no disposals of equipment during the year. (c) The investments were sold for $95,000 cash.

STATEMENT OF CASH FLOWS FORM Cash flows from Operating Activities: Net Income $132,000 Add: $ Deduct: Increase in trade receivable $ 1,500 ______ ______ Net cash flows from operating activities $

MONOPOLY COMPANY The Comparative Balance Sheets of the Monopoly Company for December 31 of the current year and the preceding year is as follows: Current Preceding Year Year Change Cash $ 93,400 $ 57,800 $35,600 + Trade receivables (net) 125,000 123,500 1,500 + Inventories 146,500 108,900 37,600 + Investments 0 65,000 65,000 - Land 145,000 0 145,000 + Equipment 367,600 278,600 89,000 + Accumulated depreciation (110,900) (87,400) 23,500 + $766,600 $546,400 Additional Information: (a) Equipment and land were acquired for cash. (b) There were no disposals of equipment during the year. (c) The investments were sold for $95,000 cash.

STATEMENT OF CASH FLOWS FORM Cash flows from Operating Activities: Net Income $132,000 Add: $ Deduct: Increase in trade receivable $ 1,500 Increase in inventories 37,600 ______ ______ Net cash flows from operating activities $

MONOPOLY COMPANY The Comparative Balance Sheets of the Monopoly Company for December 31 of the current year and the preceding year is as follows: Current Preceding Year Year Change Cash $ 93,400 $ 57,800 $35,600 + Trade receivables (net) 125,000 123,500 1,500 + Inventories 146,500 108,900 37,600 + Investments 0 65,000 65,000 - Land 145,000 0 145,000 + Equipment 367,600 278,600 89,000 + Accumulated depreciation (110,900) (87,400) 23,500 + $766,600 $546,400 Additional Information: (a) Equipment and land were acquired for cash. (b) There were no disposals of equipment during the year. (c) The investments were sold for $95,000 cash.

STATEMENT OF CASH FLOWS FORM Cash flows from Investing Activities: Add: Sales of investments $ 95,000 $95,000 Deduct: $ _______ ______ Net cash flows from investing activities

STATEMENT OF CASH FLOWS FORM Cash flows from Operating Activities: Net Income $132,000 Add: $ Deduct: Increase in trade receivable $ 1,500 Increase in inventories 37,600 Gain on sale of investments 30,000 (69,100) Net cash flows from operating activities $

MONOPOLY COMPANY The Comparative Balance Sheets of the Monopoly Company for December 31 of the current year and the preceding year is as follows: Current Preceding Year Year Change Cash $ 93,400 $ 57,800 $35,600 + Trade receivables (net) 125,000 123,500 1,500 + Inventories 146,500 108,900 37,600 + Investments 0 65,000 65,000 - Land 145,000 0 145,000 + Equipment 367,600 278,600 89,000 + Accumulated depreciation (110,900) (87,400) 23,500 + $766,600 $546,400 Additional Information: (a) Equipment and land were acquired for cash. (b) There were no disposals of equipment during the year. (c) The investments were sold for $95,000 cash.

STATEMENT OF CASH FLOWS FORM Cash flows from Investing Activities: Add: Sales of investments $ 95,000 $ 95,000 Deduct: Purchase of land $145,000 Purchase of equipment 89,000 (234,000) Net cash flows from investing activities (139,000)

MONOPOLY COMPANY The Comparative Balance Sheets of the Monopoly Company for December 31 of the current year and the preceding year is as follows: Current Preceding Year Year Change Cash $ 93,400 $ 57,800 $35,600 + Trade receivables (net) 125,000 123,500 1,500 + Inventories 146,500 108,900 37,600 + Investments 0 65,000 65,000 - Land 145,000 0 145,000 + Equipment 367,600 278,600 89,000 + Accumulated depreciation (110,900) (87,400) 23,500 + $766,600 $546,400 Additional Information: (a) Equipment and land were acquired for cash. (b) There were no disposals of equipment during the year. (c) The investments were sold for $95,000 cash.

STATEMENT OF CASH FLOWS FORM Cash flows from Operating Activities: Net Income $132,000 Add: Depreciation Expense 23,500 $ Deduct: Increase in trade receivable $ 1,500 Increase in inventories 37,600 Gain on sale of investments 30,000 (69,100) Net cash flows from operating activities $

MONOPOLY COMPANY The Comparative Balance Sheets of the Monopoly Company for December 31 of the current year and the preceding year is as follows: Current Preceding Year Year Change Accounts Payable $ 82,400 $ 74,000 $ 8,400 + Accrued Expenses 6,700 6,000 700 + Dividends Payable 18,400 15,700 2,700 + Common Stock 100,000 70,000 30,000 + Paid In excess of Par 320,000 200,000 120,000 + Retained Earnings 239,100 180,700 58,400 + $766,600 $546,400 Additional Information: (d) The common stock was issued for cash. (e) There was a $73,600 debit to Retained Earnings for cash dividends declared. (f) There was a $132,000 credit to Retained Earnings for net income.

STATEMENT OF CASH FLOWS FORM Cash flows from Operating Activities: Net Income $132,000 Add: Depreciation Expense 23,500 Increase in accounts payable 8,400 $ Deduct: Increase in trade receivable $ 1,500 Increase in inventories 37,600 Gain on sale of investments 30,000 (69,100) Net cash flows from operating activities $

MONOPOLY COMPANY The Comparative Balance Sheets of the Monopoly Company for December 31 of the current year and the preceding year is as follows: Current Preceding Year Year Change Accounts Payable $ 82,400 $ 74,000 $ 8,400 + Accrued Expenses 6,700 6,000 700 + Dividends Payable 18,400 15,700 2,700 + Common Stock 100,000 70,000 30,000 + Paid In excess of Par 320,000 200,000 120,000 + Retained Earnings 239,100 180,700 58,400 + $766,600 $546,400 Additional Information: (d) The common stock was issued for cash. (e) There was a $73,600 debit to Retained Earnings for cash dividends declared. (f) There was a $132,000 credit to Retained Earnings for net income.

STATEMENT OF CASH FLOWS FORM Cash flows from Operating Activities: Net Income $132,000 Add: Depreciation Expense 23,500 Increase in accounts payable 8,400 Increase in accrued expenses 700 Deduct: Increase in trade receivable $ 1,500 Increase in inventories 37,600 Gain on sale of investments 30,000 (69,100) Net cash flows from operating activities $

STATEMENT OF CASH FLOWS FORM Cash flows from Operating Activities: Net Income $132,000 Add: Depreciation Expense 23,500 Increase in accounts payable 8,400 Increase in accrued expenses 700 Deduct: Increase in trade receivable $ 1,500 Increase in inventories 37,600 Gain on sale of investments 30,000 (69,100) Net cash flows from operating activities $164,600 $ 95,500

MONOPOLY COMPANY The Comparative Balance Sheets of the Monopoly Company for December 31 of the current year and the preceding year is as follows: Current Preceding Year Year Change Accounts Payable $ 82,400 $ 74,000 $ 8,400 + Accrued Expenses 6,700 6,000 700 + Dividends Payable 18,400 15,700 2,700 + Common Stock 100,000 70,000 30,000 + Paid In excess of Par 320,000 200,000 120,000 + Retained Earnings 239,100 180,700 58,400 + $766,600 $546,400 Additional Information: (d) The common stock was issued for cash. (e) There was a $73,600 debit to Retained Earnings for cash dividends declared. (f) There was a $132,000 credit to Retained Earnings for net income. Declared $73,600 less increase in payable $2,700 = $70,900

STATEMENT OF CASH FLOWS FORM Cash flows from Financing Activities: Add: $______ $ Deduct: Cash paid for dividends $ 70,900 (70,900) Net cash flows from financing activities _______ Increase or decrease in cash $ 35,600 Cash at the beginning of the year 57,800 Cash at the end of the year $ 93,400

MONOPOLY COMPANY The Comparative Balance Sheets of the Monopoly Company for December 31 of the current year and the preceding year is as follows: Current Preceding Year Year Change Accounts Payable $ 82,400 $ 74,000 $ 8,400 + Accrued Expenses 6,700 6,000 700 + Dividends Payable 18,400 15,700 2,700 + Common Stock 100,000 70,000 30,000 + Paid In excess of Par 320,000 200,000 120,000 + Retained Earnings 239,100 180,700 58,400 + $766,600 $546,400 Additional Information: (d) The common stock was issued for cash. (e) There was a $73,600 debit to Retained Earnings for cash dividends declared. (f) There was a $132,000 credit to Retained Earnings for net income.

STATEMENT OF CASH FLOWS FORM Cash flows from Financing Activities: Add: Sale of common stock $150,000 $150,000 Deduct: Cash paid for dividends $ 70,900 (70,900) Net cash flows from financing activities _______ Increase or decrease in cash $35,600 Cash at the beginning of the year 57,800 Cash at the end of the year $93,400 79,100

STATEMENT OF CASH FLOWS FORM Cash flows from Operating Activities: Net cash flows from operating activities $ 95,500 Cash flows from Investing Activities: Net cash flows from investing activities (139,000) Cash flows from Financing Activities: Net cash flows from financing activities 79,100 Increase or decrease in cash $35,600 Cash at the beginning of the year 57,800 Cash at the end of the year $93,400

End Accounting II Cash flows from Operating Activities: Net Income $132,000 Add: Depreciation 23,500 Increase in accounts payable 8,400 Increase in accrued expenses 700 $164,600 Deduct: Increase in trade receivable $ 1,500 Increase in inventories 37,600 Gain on sale of investments 30,000 (69,100) Net cash flows from operating activities $ 95,500 Cash flows from Investing Activities: Add: Sales of investments $ 95,000 $ 95,000 Deduct: Purchase of land $145,000 Purchase of equipment 89,000 (234,000) Net cash flows from investing activities (139,000) Cash flows from Financing Activities: Add: Sale of common stock $150,000 $150,000 Deduct: Cash paid for dividends $70,900 (70,900) Net cash flows from financing activities 79,100 Increase or decrease in cash $ 35,600 Cash at the beginning of the year 57,800 Cash at the end of the year $ 93,400 End Accounting II

Accounting 2 Exam Information EXAM #5 – Statement of Cash Flow Objective Questions 15 @ 2 = 30 Problem #1 Statement of Cash Flows 35 Problem #2 17-4B to be turned in with your final 35 Total 100